Wednesday, May 9, 2018

"What Comes After The Cloud?"

As CTO of Adobe, Abhay Parasnis oversees the company’s technology strategy, and he’s betting big on narrow but deep AI.

Now
that every business worth its stock price has moved to “the cloud,”
creating massive technology winners like Salesforce, Amazon, and Google
along the way, the technology industry finds itself searching once more
for a metaphor that can drive its seemingly endless cycle of identifying
and building the “next big thing.” And while it seems almost too
obvious to identify artificial intelligence, or AI, as that next thing,
Abhay Parasnis, CTO of Adobe, makes a strong case for why the received
wisdom may yet prove true.

Famous
for betting the company on the cloud five years ago (and winning big),
Adobe is making an even bigger bet on a certain kind of AI — what
Parasnis calls “narrow AI.” Adobe’s goal is to leverage narrow AI across
its core suite of products in creativity, marketing services, and
business services, in the process simplifying them and making them
accessible to a magnitude of order more potential customers. Forget Terminator
references, where a generalized AI takes over the world, Parasnis told
me at the recent NewCo Shift Forum. Think instead of the magical world
of Harry Potter (minus Voldemort, of course). Below is the video and full transcript of our conversation, edited for clarity.

***

John
Battelle: It’s time to talk about the future of technology with the CTO
of one of the largest technology companies in the world. Adobe has made
an extraordinary transition, now a classic Harvard Business Review case, of how you transition from a packaged goods software company that shipped shrink-wrap software to a cloud company.

But
we’ll discuss what’s beyond that, not just for that company, but for
the entire technology industry. Please join me in welcoming Abhay
Parasnis to the Shift Forum stage, CTO of Adobe. [applause]

Abhay Parasnis: Thank you. Great to be here.

I
mentioned that transition, it was a remarkable pivot for a very large
company. But it’s part of what feels like an ongoing cycle: I started
covering technology when mainframes were out, and client-server
architecture was the cool thing. Then client server was out because
networked PCs were the cool thing. Then networked PCs became the
Internet, and that was the cool thing. Then mobile, then the cloud.

It
seems like we’ve been in the cloud long enough to say, “OK, what’s
next?” We must have another cycle or we are going to run out of ideas
here! Let me put that to you as a senior technologist in one of the
largest companies in the Valley. What might be past the cloud?

First,
on the transformation — just to tee up, thanks for all the kind
words — that transition will probably bridge a little bit to what we see
from both Adobe’s perspective, but more broadly from the industry
standpoint as we look at what’s beyond the cloud.

But
it’s worth stepping back because there are a lot of parallels between
what we just went through in our own business and as I look at the
future. As you say, there’s a lot of discussion has happened around
Adobe’s transformation. I would say the two or three core things that
may not be as well understood and that leads us to what’s next, is that
you have to recognize when maintaining status quo is just not enough.

For us, in
the last transition, there were two factors. First, back in 2008 with
the economic slowdown, where we realized that the recurring revenue that
we had as a company was such a small percentage of the business. And
when a big macroeconomic event happens, we basically said we are never
going to let that happen again as a business, both for ourselves but
also from a market standpoint.

The
second was with the advent of iPhone and the smartphone wave starting
to happen, we realized we were fundamentally misaligned with the pace of
innovation. We were still delivering 12- 18-month box software cycles
and the market was moving much quicker.

And
so those two factors led us to a point where we basically said no
matter what the cost, we have to transform ourselves. I think that
conviction and that notion that status quo is not enough is actually
pretty critical for companies that look at transitions in the
marketplace.

Frankly
in hindsight, it looks obvious, but at the time customers were not
super happy with us. Not all of the customers were happy. Some were, but
some customers were quite pissed with us, and actually felt we were not
listening to them and not doing the right thing by them. We had to have
a balancing act of listening and adapting to our current customer
needs, but also maintaining the conviction of where we had to go
relative to this space of innovation and continuous innovation.

This
is also an industry where yesterday’s success is really not that
relevant. As far as we are concerned the whole cloud transformation of
our business is done. It’s behind us and we are going to think about
what’s around the corner.

When
you ask what’s beyond cloud, first I will say, it’s not so much what’s
beyond, but rather what’s building on all the changes that have
happened. Each of the changes you mentioned, maybe except the network
computer, but mobility and the cloud have really laid a foundation of
computing model that we think unlocks pretty drastic set of innovations
for the next decade.

From
my vantage point, there are two or three areas that are super exciting.
One, I think software over the next decade is going to go through a
very transformational shift of not just being an adjunct in our lives.
Software has already had a pretty profound impact if you look at last
two, three decades from automation to productivity to touching lots of
our professional lives and personal lives....MUCH MORE, including video